Top Stocks Under Rs 2500: How many months would you wait to buy Zara clothing under Rs 2500 when it is on SALE? 1 month, 2, or 3? Can’t say about Zara though, but you can definitely buy fundamentally strong stocks under Rs. 2,500.
Delayed gratification has its own charm, plus it can make you rich. Saving today and investing, may get you dividends as well as clothes some years later.
In this article, we cover fundamentally Top Stocks Under Rs 2500. We look at five different companies, some of them industry leaders. We look at their business models and key metrics. In the end, we present a table with more such stocks.
So without further ado, let us jump in.
Top Stocks under Rs 2500
Here is a list of top stocks we found that are fundamentally strong to fit the criterion:
Top Stocks Under Rs 2500 #1 – HDFC
Housing Development and Finance Corporation (HDFC) was promoted in 1977 by the Industrial Credit and Investment Corporation of India (ICICI). Renowned banker Hasmukhbhai Parekh played a pivotal role in the establishment of HDFC making it the first specialized mortgage financier in India.
Over the years, the finance company ventured into various other sectors to become a multi-product financial conglomerate.
Below are all the companies owned by HDFC along with its % holding:
- HDFC Bank (20.97%): India’s largest private sector bank in terms of asset size
- HDFC Life (47.79%): Second-largest private life insurer in India in terms of new business premiums.
- HDFC Mutual Fund (52.59%): One of the top three AMCs with a total AUM of $ 3 billion.
- HDFC Ergo (49.98%): One of the three largest private general insurers.
- HDFC Sales (100%): Its financial services distribution subsidiary.
- HDFC Credila (100%): Its dedicated education loan subsidiary with a loan book of $ 1.2 billion.
- HDFC Property Fund (100%) and HDFC Capital (88.24%): Property funds set up for the development of affordable housing in India.
The HDFC Group is undergoing a major structural change as all the companies will be merged together to form one entity. HDFC Investments and HDFC Holdings will be merged first with HDFC Ltd. Later. HDFC Ltd. will be merged with HDFC Bank Ltd.
| CMP | ₹2,482 | Market Cap (Cr.) | ₹450,000 |
| Stock P/E | 19.7 | Face Value | ₹2.00 |
| ROCE | 8.6% | Book Value | ₹990 |
| ROE | 13.4% | Price to Book Value | 2.51 |
| Debt to Equity | 2.83 | Dividend Yield | 1.21% |
| Net Profit Margin | 17.70% | Operating Profit Margin | 34.50% |
Top Stocks Under Rs 2500 #2 – Adani Green Energy
Founded in 2015, Adani Green Energy Ltd. (AGEL) is one of the largest green energy companies in India. It is part of the power-to-ports conglomerate Adani Group and has a project portfolio of 20,434 MW.
The company establishes, owns, and operates large-scale grid-connected solar and wind energy farms. The electricity produced from these plants is supplied to central and state government institutions for usage and distribution.
AGEL presently has a portfolio of 54 operational projects across 12 Indian states. In addition to this, 12 of its projects are under construction. A feather in its cap, AGEL operates the world’s largest solar power plant in Kamuthi, Tamil Nadu located at a single location of 2,340 acres.
The top line of AGEL has grown at a CAGR of 28.24% over the last five years. During this period, the company grew organically and inorganically as and when the company found attractive acquisition opportunities.
| CMP | ₹2,400 | Market Cap (Cr.) | ₹380,000 |
| Stock P/E | 760 | Face Value | ₹10.0 |
| ROCE | 7.86% | Book Value | ₹7.61 |
| ROE | 42.40% | Price to Book Value | 313 |
| Debt to Equity | 44.4 | Promoter Holding | 60.50% |
| Net Profit Margin | 8.47% | Operating Profit Margin | 68.40% |
| Interest Coverage Ratio | 1.51 | Dividend Yield | 0.00% |
Top Stocks Under Rs 2500 #3 – Astral
Astral Pipes was set up in 1996 to meet the demand for plumbing and drainage systems in India. Over the years, the company has scaled to become a leading solutions provider of industrial, drainage, agricultural, and residential pipes & fittings, water tanks, cable protection, adhesives & sealants, and more.
The company owns 18 manufacturing facilities in 3 countries with backward integrated capabilities for CPVC compounding of 45,000 MTPA. Astral Pipes has a workforce of 6,000+ employees and a wide network of over 1,535 distributors.
It enjoys strong brand equity and was included in the Fortune India 500 Company list of 2016. As recently as last year in 2021, it was profiled in Dun & Bradstreet’s list of India’s Top 500 Companies.
Astral Pipes invested Rs. 1,000 crores in the last five years. The management expects the company to grow at a CAGR of 15% every year against the industry’s growth rate of only 9-10%.
| CMP | ₹2,358 | Market Cap (Cr.) | ₹47,400 |
| EPS | ₹24.8 | Stock P/E | 94.9 |
| ROCE | 29.60% | ROE | 22.6 |
| Face Value | ₹1.0 | Book Value | ₹116 |
| Promoter Holding | 55.70% | Price to Book Value | 20.2 |
| Debt to Equity | 0.04 | Dividend Yield | 0.11% |
| Net Profit Margin | 11.0% | Operating Profit Margin | 17.2% |
Top Stocks Under Rs 2500 # 4 – Deepak Nitrite
Deepak Nitrite Ltd. is a five-decade-old chemicals company with a 70% market share in necessary inorganic chemicals. It has an extensive product portfolio of over 100 products which are consumed by more than its 1,000 clients worldwide. Based out of Gujarat, the company produces organic, inorganic, fine, and specialty chemicals.
It is a leading producer of Sodium Nitrite and the largest producer of Phenol & Acetone in India. Its chemical intermediaries find use in products such as pharmaceuticals, agrochemicals, personal care, adhesives, paper, coatings, detergents, and more.
It has been one of the beneficiaries of the boom in India’s chemicals industry. Its profit margins have increased sharply giving a better return on its capital employed and equity for its investors.
It has paid back its debt as well reaching a low debt-to-equity ratio of 0.09. As a result, its stock price has increased multifold in the last two years generating multi-bagger returns for its shareholders.
| CMP | ₹2,140 | Market Cap (Cr.) | ₹29,200 |
| EPS | ₹73.20 | Stock P/E | 29.3 |
| ROCE | 44.5% | ROE | 37.4% |
| Face Value | ₹2.0 | Book Value | ₹245 |
| Promoter Holding | 45.70% | Price to Book Value | 8.71 |
| Debt to Equity | 0.09 | Dividend Yield | 0.33% |
| Net Profit Margin | 15.6% | Operating Profit Margin | 23.6% |
Top Stocks Under Rs 2500 #5 – Escorts Kubota
Formerly known as Escorts Ltd., Escorts Kubota Ltd. is involved in the production of railway, construction, and Agri equipment. It manufactures brake systems, suspension systems, cranes, road rollers, tractors, engines, and more.
Escorts was set up in 1944 and has grown to employ over 11,000 people today. Last year, Japan’s largest tractor manufacturer Kubota invested Rs. 9,400 crores in Escorts. After the transaction, it became the single largest shareholder in the domestic company. Later, the name was changed to Escorts Kubota Ltd.
The automobile company owns 6 plants excluding JVs and subsidiaries.
It is a debt-free stock. Barring FY20, Escorts Kubota has increased its revenues over the past five years. It has performed well despite the downturn in the automobile sector and the subsequent demand evaporation because of the pandemic.
Consequently, its stock has generated an annualized return of 26.53% for its shareholders.
| CMP | ₹2,084 | Market Cap (Cr.) | ₹27,500 |
| EPS | ₹53.80 | Stock P/E | 39.4 |
| ROCE | 15.0% | ROE | 11.0% |
| Face Value | ₹10.0 | Book Value | ₹593 |
| Promoter Holding | 72.90% | Price to Book Value | 3.52 |
| Debt to Equity | 0.01 | Dividend Yield | 0.34% |
| Net Profit Margin | 10.0% | Operating Profit Margin | 12.7% |
List Of Top Stocks Under Rs 2500
We covered some attractive top stocks under Rs 2500 in detail above. The list below presents more such companies with share prices under Rs 2500.
| Company Name | Industry | CMP (Rs.) | Market Cap (Rs. Cr.) |
|---|---|---|---|
| HDFC | Financial Services | 2,482 | 450,000 |
| Adani Green Energy | Renewable Energy | 2,400 | 380,000 |
| Astral | Plastics | 2,358 | 47,400 |
| Deepak Nitrite | Chemicals | 2,140 | 29,200 |
| Escorts Kubota | Automobile | 2,077 | 27,400 |
| Mphasis | IT | 2,077 | 39,000 |
| Gland Pharma | Pharmaceuticals | 2,169 | 35,700 |
| Dr Lal Pathlabs | Pharmaceuticals | ₹2,381 | ₹19,000 |
| Amber Enterprises India | Consumer Durables | ₹2,267 | ₹7,600 |
| Polyplex Corporation | Packaging | ₹2,085 | ₹6,500 |
In Conclusion
In the article above we covered fundamentally Top stocks under Rs 2500.
Some readers may object to Adani Green Energy’s inclusion in the list. AGEL has all of its 100% energy production secured with long-term power purchase agreements.
This gives the company strong revenue visibility on the back of which it is able to borrow more to acquire/build more energy farms. As for HDFC’s high debt-to-equity ratio, that is the nature of the industry in which it operates.
Nevertheless, this list may serve as a good starting point if an investor is planning to screen stocks on the basis of their stock price. How about you tell us what parameters you use for screening stocks?
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